August 2019
News and Updates
Here are some updates from the Texas Telephone Association. View as Webpage
Update from Executive Director Lyn Kamerman
Dog days of summer are here and TTA convention just around the corner
We are in the dog days of summer and activities in Austin and the halls of the Texas Capitol and the Public Utility Commission of Texas are beginning to heat up.

We are putting the finishing touches on plans for the Texas Telephone Association Convention and Product Showcase set for August 25-28 in San Antonio. I hope you plan to join us at the convention where we will be discussing some of the pressing issues impacting the telecommunications industry today.

We are also looking forward to our annual TTA golf tournament on Monday August 26 at the Hyatt Regency Hill Country Resort in San Antonio. This tournament always has been a great time for our members and supporters and raises funds for the TTA Political Action Committee. This event will be even more special this year as we are playing the tournament in honor of our great friend John H. Greenberg of Btel, who passed away earlier this year.

Support, sponsorships and gifts to the convention events and the raffle are a huge part of making this event a success and the TTA team appreciates its member support.

At the same time, the TTA team is continuing to work closely with member companies to advocate for policies in the regulatory arena to support a strong telecommunications industry. 

Notably, the TTA team’s decision to be the only intervenor to actively oppose Virgin Mobile’s application to expand its Lifeline service area in parts of Texas laid the groundwork for a recent decision by the Texas PUC to deny Virgin Mobile access to additional state lifeline support, limiting a growing concern related to the overall health of the Texas universal service fund program.

The Texas PUC during its August 8 open meeting ruled on Virgin Mobile’s application to expand its Eligible Telecommunications Carrier (ETC) and Eligible Telecommunications Provider (ETP) designation in certain service areas in Texas. The commission denied Virgin Mobile’s request to expand its ETP-designated area, but granted the request to expand its ETC-designated area – which is consistent with the settlement agreement TTA reached with Virgin Mobile early this year.

Virgin Mobile, hinting at some frustration with the PUC’s lack of action in the case, filed a letter with the commission on July 31, asking the PUC to consider the pending application at the next open meeting, indicating there was no dispute between the remaining parties in regard to its ETC designation. Given that Virgin Mobile received $3.3 million in state Lifeline support in the second quarter of 2019, the commission’s delay has clearly been costly, but the company’s troubles may just be starting.

Texas PUC Chair DeAnn T. Walker on August 7 released a memorandum in the case that could jeopardize Virgin Mobile’s ETP designations in the larger price cap service areas in Texas, putting at risk the company’s current state lifeline support. Consistent with TTA’s prior testimony in the Virgin Mobile case, Walker’s memorandum indicates that in order to be designated as an ETP, a company must provide all elements of basic local telecommunications service. Walker points to the commission’s action in Virgin Mobile’s prior two price cap cases and notes “whether Virgin Mobile is in compliance with the Commission’s orders and providing the service ordered in the [prior orders] is a question for another proceeding.” Walker further notes that “I do not believe that the rule allows for good cause exceptions for the requirements to the designation as an ETP” and that she “do[es] not believe that the good cause exception [from the requirement to provide operator services] granted in the previous [orders] are allowed under the rules.”

Whether the Texas PUC will now open an investigation into whether Virgin Mobile is meeting its existing obligations as an ETP remains to be seen. However, based upon the Texas PUC’s decision, it is possible Virgin Mobile could be investigated and ordered to refund all of the state Lifeline support it has received since 2017 in Texas because of its failure to provide all elements of basic local telecommunications service to its customers in Texas.

Meanwhile, in another win for TTA, Q Link Wireless on July 26 filed a request to withdraw from Texas PUC consideration its request for designation as an ETP and eligible to receive state low-income support for its Lifeline customers within the AT&T, Frontier, and CenturyLink service areas. TTA in May 2019, filed comments on Q Link’s application pointing out the various discrepancies in Q Link’s positions in this latest case seeking state low-income support as a facility-based provider and Q Link’s prior cases seeking a similar designation as a reseller.

Q Link withdrew its request for ETP designation without prejudice, which means that it could refile a similar request at some point in the future.

Texas universal service fund revenues dip

Texas universal service fund revenues dropped by nearly 18 percent for the second quarter of 2019, according to the Texas PUC’s Texas Universal Fund Financial Report covering March through May 2019. Texas USF revenues are based upon an assessment on telecommunications providers’ intrastate taxable telecommunications receipts. 

While revenues have been steadily declining, during the second quarter, Texas USF revenues unexpectedly fell from $43.7 million in the prior period to $35.9 million. The balance in the fund on March 1 was $170.5 million and fell to $152.9 million on May 31. 

Over the same period, demand for state low-income support increased from $571 thousand to $3.7 million -- an increase of 552 percent. Increased demand for state low-income support was mainly related to a dramatic increase in payments to one provider, Virgin Mobile, which received $3.3 million in state lifeline support during the second quarter of 2019. 

Demand for the main two components of the high-cost funding mechanism Small and Rural Incumbent Local Exchange Carrier Universal Service Plan support and Texas High Cost Universal Service Plan support – remain relatively steady at about $20 million each per quarter.

SB 586 reviews still pending

The Texas PUC has not yet acted on commission staff’s recommendations related to Texas telecommunications companies SB 586 reports and companies remain in a holding pattern. Those companies interested in seeking additional high-cost support should continue to prepare draft applications for funding increases.

We will continue to monitor commission action on this important issue. The next PUC open meeting is scheduled for August 29.

Texas PUC makes no changes to municipal franchise fee program

In a blow to cities’ municipal franchise fee revenues, the Texas PUC on August 8 approved a commission staff recommendation to let stand the current definition of “access line” for the purpose of accessing municipal franchise fee charges.

Under Texas law governing municipal franchise fees, the commission is required to regularly review the definition of access lines to consider “whether changes in technology, facilities, or competitive or market conditions justify a modification in the commission-established categories of access lines or, if necessary, the adoption of a definition of access line.”

Commission staff in a memo to the commissioners noted that “over-the-top” providers of Voice over Internet Protocol services continue to be excluded from the requirement to pay municipal franchise fees, but did not have an administratively-easy solution to begin assessing franchise fees on such services. Staff also noted the Texas Legislature in 2017 adopted changes to the law to address franchise fees paid by wireless network providers seeking to deploy small-cell technologies. Interestingly, the commission staff hinted that should the commission redefine “access line,” it would likely result in an increase in the number of access lines subject to municipal franchise fees and it would be reasonable to require cities to rebalance their base municipal franchise fee revenues, which have likely declined since they were originally established 20 years ago before customers began transitioning to wireless-only and over-the-top VoIP services. 

Texas PUC approves assessment for live Internet broadcasts

The Texas PUC on August 8 approved assessing charges to certain regulated entities to cover the cost of broadcasting meetings. According to the PUC staff’s revised memo and proposed order , the commission contracts with a third party to provide live Internet broadcasts of meetings at a cost of $190,800 per year. As the vast majority of PUC meetings relate to electric matters, the PUC is assessing only 10 percent of the annual costs to telecommunications providers and that only the two largest telecommunications companies that are considered public utilities -- Windstream and CenturyLink – should be assessed $9,540 each. The remaining 90 percent of the annual costs will be assessed to electric service providers.

Connected Texas seeks broadband coverage information

Connected Texas has reached out to TTA and some of its members seeking broadband coverage information in an effort to map unserved and underserved areas in Texas. Connected Texas indicates it is working on behalf of the Texas Rural Funders Collaborative , which is made up of a number of charitable and education-related foundations. Connected Texas’s indicates it will be creating a granular broadband availability map to accurately reflect where, and at what speed, residential broadband service is available throughout the state.

Wes Robinson of Eastex, TTA regulatory chairman, provided Connected Texas’ representative a number of publicly-available sources showing detailed broadband availability, including USAC’s CAF Broadband Map . Connected Texas has contacted TTA members directly seeking granular company-specific broadband coverage information.

TTA has invited Connected Texas to attend its annual meeting later this month and has offered a booth in the vendor showcase. Members are free to provide broadband coverage information to Connected Texas if they so choose, but they are under no obligation to do so.

To date, most of TTA’s member companies have indicated they would prefer not to supply broadband coverage information directly to Connected Texas. Please let us know how we can help.

NCTA takes aim at pole attachment rates

NCTA – The Internet and Television Association on July 22 filed a letter with the FCC on the economic impact caused by municipalities’ and electric cooperatives’ exemption from federal pole attachment regulations.

The NCTA submitted a report from Dr. Michelle Connolly, a former FCC chief economist, that demonstrates the monopoly pole attachment rates charged by exempt municipalities and electric cooperatives “are more than double the rates charged by investor-owned utilities.”

NCTA made the filing in response to a recent paper submitted by the National Rural Electric Cooperative Association that suggested there is no need for the FCC to be concerned about excessive pole attachment rates charged by municipalities and electric cooperatives. Dr. Connolly points out in her paper that not only does the certainty of currently excessive pole attachment rates deter broadband deployment, but the prospect of unregulated increases in those rates once broadband has been deployed can hamper the deployment of additional broadband facilities. Further, Dr. Connolly points out that these concerns are exacerbated in cases where the municipal or electric cooperative is an actual or potential competitor in the broadband market.

TTA and its members worked diligently this past legislative session to add provisions to Texas law that require electric cooperatives that deploy broadband facilities to have just and reasonable pole attachment rates. It was a significant win that would not have occurred without TTA and its member companies’ organized efforts. However, these changes do not specifically require Texas electric cooperatives to use FCC formulas in setting pole attachment rates.
Around the Texas Capitol – John Hubbard and Ian Randolph
Texas Capitol remains alive in the summer heat
Summer is winding down. Kids are getting ready to return to school and talk of football is becoming more frequent. The Capitol and the Texas Legislature are about to start pick up once again as well.

In preparation for the next legislative session, during the 19-month interim period between regular legislative sessions the leaders in the Senate and House of Representatives instruct their respective committees to research and investigate specific topics and issues and to monitor implementation of bills passed in the last legislative session. These charges are known as “interim charges.” The legislative leadership also can create committees – or “special committees’’ – not already established to examine a certain topic. Occasionally, the lieutenant governor and the speaker of the House also will assign members to serve on joint committees to look at specific issues. Perhaps the best recent example of a joint committee was the Texas Commission on Public School Finance that met during the last interim after the 2017 legislative session.

Two years ago, Lt. Gov. Patrick issued 10 pages worth of interim charges for the Senate while House Speaker Joe Straus, in his last interim as speaker, issued 40 pages of interim charges for the House of Representatives. As issues arise it is not uncommon for the legislative leadership to add new topics to these charges.

Once interim charges are issued, the various committees will typically begin to meet in the fall following a legislative session — with the expectation committees will issue a report to the full Legislature before the start of the next regular session. Interim reports can vary in length from a single page to hundreds of pages depending on the issue and its complexity.

Now that summer is coming to an end, look for the House and Senate leadership to issue interim charges in the coming weeks and for committee hearings to begin later this year.

While interim committees are considered the beginning of the next legislative process in Texas the Capitol remains alive in the summer heat. The most explosive development this summer relates to a meeting between House Speaker Dennis Bonnen, R-Angleton, and Michael Quinn Sullivan, the conservative activist and CEO of Empower Texans. During the meeting, the speaker allegedly offered Empower Texans news media credentials that provide access to the House floor while the Legislature is in session in return for Empower Texans working to defeat 10 Republican House members in the 2020 primary.

While the speaker denied the allegations, he has issued a public written apology to the House membership admitting that he “said terrible things that are embarrassing to the members, to the House, and to me personally. You know me well enough to know I say things with no filter. That’s not an excuse for the hurtful things I said or the discussion that was had.”

The Texas House General Investigating Committee voted Monday August 12 to request that the Texas Rangers look into the case.

What implications this has for Speaker Bonnen, the House members that were allegedly targeted or the Republican Party as a whole remains to be seen. However, one thing is clear: the fight between the traditional pro-business wing and the neo-conservative wing of the Republican Party is not going away anytime soon.

As always, if there’s anything we can do for you here in Austin or if you have questions don’t hesitate to get in touch.

Stay cool.
Association News
There is still time to register for TTA Convention and Product Showcase set for August 25-28 
There is still time to register for the Texas Telephone Association Convention and Product Showcase scheduled for August 25-28 in San Antonio.

Some 150 telecommunications industry professionals will gather at the Hyatt Regency Hill Country Resort and Spa in San Antonio a nd discuss key issues impacting the telecommunications industry.

To register for the TTA convention, please visit the registration page

Any questions? Please contact Joann Kamerman at joannkam@tta.org
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In the State and Around the Nation
FCC takes action to expand broadband availability, improved broadband mapping
The Federal Communications Commission on August 1 “proposed taking its biggest single step to date toward closing the rural digital divide” by establishing the Rural Digital Opportunity Fund, which would direct up to $20.4 billion to expand broadband in unserved rural price cap service areas, according to an FCC news release.

“The proposal would raise the bar for rural broadband deployment by making more areas eligible for support and requiring faster service than last year’s Connect America Fund (CAF) Phase II reverse auction,’’ the FCC said. “If the FCC ultimately approves these proposals, millions more rural homes and small businesses would be connected to high-speed broadband networks providing up to gigabit speeds.”

In a notice of proposed rulemaking adopted by the FCC, the agency seeks comment on continuing the expansion of broadband where it’s lacking by using a reverse auction framework. The Rural Digital Opportunity Fund would focus on areas currently served by price cap carriers, along with areas that were not won in the CAF Phase II auction and other areas that do not currently receive any high-cost universal service support.

The FCC also adopted a report and order and notice of proposed rulemaking to better identify gaps in broadband coverage and identify coverage in a more granular level. This new program – known as the Digital Opportunity Data Collection (DODC) program – would collect geospatial broadband coverage maps from fixed service providers. The new program also would adopt a crowdsourcing process to test the accuracy of carrier-reported data. The order also made targeted changes to the FCC’s Form 477 data collection to reduce reporting burdens on providers.

In addition, the FCC’s Wireline Competition Bureau, Rural Broadband Auctions Task Force, and the Office of Economics and Analytics on July 15 issued a public notice authorizing Connect America Fund (CAF) Phase II Auction support for winning bidders. Winners include AMG Technology Investment Group, LLC (Nextlink Broadband), who will receive $75 million over ten years to deploy broadband service to 33,803 locations in Texas.
In the News
Dallas-Fort Worth is one of the country’s fastest-growing regions. It boasts a hot real estate market and is home to  two dozen Fortune 500 companies.  But on Tuesday, the Federal Reserve Bank of Dallas spotlighted a problem that jeopardizes the upward mobility of some of the region's residents: a sharp divide between people who have access to reliable internet service and those who do not. About 160 city officials, nonprofit leaders, business executives and educators gathered at the all-day  Digital Inclusion Summit  in Dallas. The event   focused on the importance of reliable, affordable, high-speed internet — and solutions that could help expand access to everyone.  Read more.

As part of its multi-wave effort to improve broadband mapping across the rural U.S., the Federal Communications Commission (FCC) authorized more than $121 million in funding over the next decade to expand broadband to 36,579 unserved rural homes and businesses in 16 states. The FCC believes that there are significant gaps in national broadband coverage, and therefore, a need to better identify where those gaps may be. In response to this need, the FCC established  the Digital Opportunity Data Collection , which will collect geospatial broadband coverage maps from fixed broadband Internet service providers of areas where they make fixed service available.  Read more.

Have you heard about two new state laws designed to make it easier for you to stop telephone scammers from calling your phone? One imposes civil penalties on violators, while the other adds criminal penalties. You can help bust these crooks that annoy you. I'll show you how. Read more.

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